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Shifts in Digital Budget Allocation in India, as Spend Drives Higher

Digital spend to rise by 30%

April 23, 2013 | Media Buying

India’s internet user population is set to grow by over 30% this year to reach 161.6 million individuals, according to eMarketer estimates, and projected to cross the 200 million mark in 2014. As more consumers head online, ad spending on digital formats is rising alongside.

The Internet & Mobile Association of India (IAMAI) and Indian Market Research Bureau International reported that during fiscal year 2012, which ran from April 1, 2012, through March 31, 2013, digital ad spending in India rose by 29%, and this year it will grow by another 30% to reach nearly INR30 billion ($548 million).

Digital Ad Spending in India, FY 2011-FY 2015 (billions of Indian rupees and % change)

Display and search have dominated the digital ad market in India, but newer formats are gaining attention and attracting more dollars in India. At the end of fiscal year 2010, more than nine out of 10 internet ad dollars came from display and search. By March 2013, that share was down to 67% for the year, with display showing the steepest decline.

The IAMAI, which breaks out social separately from display, estimated that in 2012, mobile, social, email and video accounted for the remaining one-third share of spending.

Digital Ad Spending in India, by Format, FY 2010-FY 2012 (billions of Indian rupees and % of total)

Mobile made a particularly notable leap in 2011, according to IAMAI’s research, growing by 88%. Mobile has an especially important role to play in the online marketing mix in India, as a substantial number of internet users access via the portable devices. eMarketer estimates that this year nearly one-quarter of mobile phone users will access the mobile internet—approximately 120 million consumers—and not far below the total number of internet users in the country.

Social media and video ads also leapt by 71% each over the course of fiscal year 2011.

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